Nov 21, 2012 3:00pm EST
you know, our strategy is about 45% in cash while the prefunctory -- what we'll have left to boost us higher. i think the market does go higher. here's why. you have $85 billion each month from the federal reserve as far as balance sheet expansion. you have negative real interest rates that will be getting even more negative. i expect inflation to take off significantly early in 2013. >> but if you're sitting on 45% cash, that says to me you're still expecting more downside here. don't you think we've already seen that? >> no, no, i don't. i think when everybody came out of that meeting in d.c. and shook hands and said we're going to find some kind of deal, that's what saved the market. if that doesn't lead to a deal by mid-december, i think we're going to see another huge leg down towards the end of the year. >> what are you buying right now? >> we think this is a buy opportunity. some of the dividend paying stocks and high yielders got hit pretty hard the last few weeks. we think it's a great opportunity with some great yields. bottom line, get paid to wait until there's more clarit
Nov 21, 2012 4:00pm EST
joining us. >> sure, maria. >> well, tell us, what happened first yesterday at final mediation talks? was a deal ever close? >> you know, the judge has a gag order. he'll have my head if i talk about what went on during the mediation, but i think that he wanted to make sure that he did everything in his power to try to find a deal, if there was one to be found. you know, i appreciate the fact that he went through that effort. i was hopeful, but i think realistically that was going to be a tough thing to pull off. >> how much of an implication it was the fact the union leader did not show up to those mediation talks? >> well, the leader of the bakers union sent his second in command to the meeting. i think that part of what we needed to sort of focus on is the hole that's been created by the strike and the financial damage from that strike and our inability to produce at some of our critical plants. really just created a brand new hole that was too large to fill. bankrupt companies don't have a lot of margin for error to begin with. if you take a shot like that, it's going to be hard to cl
Nov 21, 2012 3:00pm EST
. is there a subgroup that you like that you would like to protect us? >> they're not a lot of places to hide because a lot of the return is driven by dividend paying stocks. i think the way to think about it is what happened the last time the rates went up by dividend stocks. it had been when president clinton came into office. what happened to the market over the next 10 years, returning 9.3% per year. the macro environment is much more important than the tax environment. when president bush lowered the tax rate in 2003 the annualized return for the next decade through yesterday, 6.3% per year. cheryl: 40% of returns aren't taxed, many are in it for the long haul going long-term. you have the income disparity. 250 and above, that does not mean everyone. >> that is a great point. they're not sensitive to race. the dividend stocks were sold down because of taxes, lot of people going to buy them because they might be undervalued and take advantage of it. the other point is about 40% of the folks collecting dividends every year as effeminate less than a quarter million dollars per year.